State partially lifts gag order on the case, says that Israeli man who held double citizenship was jailed and then committed suicide in his cell; Israeli authorities investigating possibility of negligence.

Israel has officially recognized on Wednesday the existence of "Prisoner X", saying that an Israeli man, who also had foreign citizenship, was jailed under a false identity and eventually committed suicide.

The information was released after a gag order on the case was partially lifted. According to the gag order, Israeli authorities are investigating the possibility of negligence surrounding the death of the prisoner, who was found dead in his cell two years ago.

The document indicated that the inmate was registered under a false identity for security reasons, but that his family was notified immediately upon his arrest.

According to the report, Judge Daphna Blatman Kedrai, the president of the Rishon Letzion Magistrate's Court, ordered an investigation into the circumstances of his death. The gag order said that the prisoner was detained as per the order issued by an authorized court.

"The proceedings in the prisoner's case were overseen by the topmost officials in the Justice Ministry, and his rights were protected in accordance with the law," the gag order said.

The mysterious identity of Israel’s Prisoner X was exposed in in an explosive report that was broadcast by the Australian Broadcasting Corporation on Tuesday, who said that the prisoner was Ben Zygier, who took the Hebrew name Ben Alon.

According to the report, Zygier, 34 at his death, was an active member of Melbourne's Jewish community before immigrating to Israel and serving in the army. He was married to an Israeli woman and had two children.

He was found hanged in his cell in an isolated wing of Ayalon Prison that was under constant observation on December 15, 2010. His funeral was held in Melbourne a week later.

The Australian newspaper The Age reported Wednesday that Zygier was under investigation by Australian intelligence months before he was arrested in Israel. He was being looked into for fraudulent use of his Australian passport for espionage purposes.

The Australian national went by the Hebrew name Ben Alon, and had a third name, Ben Allen, listed in his Australian passport, according to ABC reporter Trevor Bormann.

A spokesman for the Australian foreign affairs minister, Bob Carr, admitted early Wednesday that the Israeli authorities had informed a diplomat at the Australian Embassy in Tel Aviv about the arrest, but the diplomat never relayed the information to Canberra.